Barrick funds construction of new homes in Nevada to address housing shortage

Barrick’s Justin Gojkovich and his wife Sara with their four daughters in front of the new, Barrick-funded apartment complex in Elko, Nevada.

The growth of the Nevada gold-mining industry has been a much-needed source of jobs in the recession-battered state, but one consequence of the hiring surge is that new employees often have a hard time finding a place to live in rural mining hubs like the city of Elko.

Barrick has more than 5,000 employees at its operations in Nevada, up from 2,850 in 2007. The company expects to hire about 330 new employees this year after hiring a similar number in 2011. Many of these new workers will settle in and around Elko, the largest city in northeastern Nevada. Elko is within a two-hour drive of all five of Barrick’s Nevada mines.

“At this point in time, we estimate we need 800 multi-family units just to accommodate existing demand for housing in the city of Elko,” says Pam Borda, Executive Director of the Elko County Economic Diversification Authority. “That doesn’t include anticipated growth.”

To help alleviate the problem, Barrick provided $12 million in financing to a local builder to construct the first phase of a new apartment complex in Elko called Rabbitbrush Run. The first phase includes 72 units in six three-story buildings that are occupied entirely by Barrick employees and their families.

“We’ve had many developers approach us in recent years with proposals for everything from trailer parks to major subdivisions,” says Lou Schack, Director of Communications for North America. “Anyone who lives here knows the demand for housing has been strong for many years. Unfortunately, most developers struggle to get financing because the banking decisions are made in larger cities, where the recession continues.

“Eventually, it was clear that if we were going to add capacity in this small market, we’d have to dive in and play a bigger role than we expected.”

Construction of a second phase at Rabbitbrush Run is underway with completion expected by July 1, 2012. Barrick is also funding this phase, which will include five buildings and 60 apartments for Barrick employees. A third phase is under consideration and would include an additional five buildings and 60 units. Because rental housing is limited in Elko and rentalrates are at record highs, Barrick employees pay reduced rents under an agreement with the property owner.

Justin Gojkovich, a maintenance technician at Barrick’s Goldstrike mine, recently moved into a three-bedroom apartment in Rabbitbrush Run with his wife and four young daughters. “It’s a really nice apartment,” he says. “I wouldn’t have been able to maintain employment if Barrick hadn’t made the extra effort and got a place for me to stay. There is just no affordable housing in Elko other than what they’re providing me now.”